Starbucks avoids paying employees for every second worked in California… for now. Do Ontario employers have the same ability?

Retail employers often require employees to log out of their time keeping system before finishing the last tasks of the day, such as setting the alarm and locking the door. As a result, that time worked is not being captured in the employer’s records and consequently may not be time for which employees are paid.

In Troester v. Starbucks, a shift supervisor working in California claimed that he and other workers were required to clock out of the company’s computer system before finalizing store closing tasks. Troester’s time spent doing closing tasks over a 17-month period added up to 12 hours and 50 minutes, or nearly $103 at the applicable $8.00-an-hour minimum wage at the time.

In the United States, Federal and California laws generally require that employers track and record all hours worked by non-exempt employees and pay them wages for that time. The de minimis rule is an established defense under the federal Fair Labor Standards Act to claims for unpaid wages for small amounts of time that employees spend “off the clock” on tasks that are difficult or impractical to track. Federal courts analyze several factors to decide whether employers may disregard such time as “de minimis”— (1) the practical difficulty the employer would encounter in recording the additional time, (2) the total amount of compensable time and (3) the regularity of the additional work. Federal courts in California have held that employers need not pay wages for minutes that employees spend outside of their scheduled shifts that are not susceptible to precise recording, such as logging in to a computer or donning and doffing safety equipment.

The lower court in Troester v. Starbucks found that the time spent by employees performing closing tasks after they logged out of the time tracking system was de minimis and granted summary judgment in favour of Starbucks. The plaintiff appealed to the California Supreme Court, who has yet to release its decision.

Are Ontario employers who don’t pay employees for every second worked contravening the law?

The Ontario Employment Standards Act (the “ESA”) requires employers to pay employees when work is being performed, and explicitly excludes time when an employee is on a meal break. However, there are some unexpected instances when an employer may not realize that it has an obligation to pay an employee:

Unrecorded Time Worked: If the employee performs work on behalf of an employer (even if it is forbidden by a term of the employment contract or it’s not authorized by the employer) they are entitled to be paid that time. Concerns about this requirement often arise in relation to post-termination overtime claims.

Required Presence at the Workplace: In addition, an employee is entitled to be paid where they are required to stay at the workplace but are not working if: a) they are waiting or holding themselves ready for call to work or, b) they are on a rest or break-time other than an eating period.

Limited Types of Commuting Time: Generally speaking, commuting time (as in the time it takes an employee to get to and from work) is not considered working time under the ESA but, there are exceptions:

When, for the convenience of the employer, the employee drives a work vehicle to get to and from home, the employer must pay the employee’s commuting time;

If the employee is required to transport other staff or supplies to or from the workplace or work site, then the time spent transporting must be paid; and

If the employee has a usual workplace but is required to travel to another location to perform work, then the commuting time spent traveling to and from that other location must be paid.

Travel Time: Time spent travelling during the course of the workday must also be paid.

So, in short, Ontario employers must pay for every second an employee is actually “working”.

The PH perspective:

No De Minimis Defence: The concept that because work performed was minimal, it should not be paid, does not exist in Ontario. So, with few exceptions, all time spent working must be paid.

Work = Pay: Ontario employers cannot defend non-payment for time worked by saying the time was not authorized or was forbidden by terms of a contract. If an employee can prove that they worked the time, then they are entitled to be paid for it.

Policies and Discipline: In situations where employees work despite being told not to work (for example when employers require that overtime be pre-authorized and an employee works overtime without the pre-authorization), an employer may discipline the employee for failing to follow instructions but still must pay the employee for the time worked.

Account for “Extra” Tasks: Ontario retail employers should account for the fact that there are closing tasks to be performed after an employee logs out of a computer time tracking system and should take steps accordingly to record that extra time and pay for it.

As a result, employers in Ontario ought to be wary of asking employees to perform any work without pay. Otherwise, they may find themselves on the wrong end of a lawsuit and in violation of Ontario employment laws.

By Patrizia Piccolo, Partner and Co-Founder

*special thanks to Sabrina Morcos and Emily Cohen-Gallant for their assistance with this article.

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Prominent Canadian lawyers Patrizia Piccolo and Jennifer Heath have come together as Piccolo Heath LLP, Canada’s newest employment law firm. With more than 30 years combined expertise, the firm was founded with the purpose of delivering outstanding legal counsel and dynamic, client-focused service. Piccolo Heath LLP is focused on guiding clients through the legal landscape to determine the best solutions to their unique issues. The firm is well-versed in current employment-related case law and statutes, but is also highly sensitive to the practical impact of the law on both employers and employees. Read more.

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